Secondary Sources: Fiscal-Cliff Can, Housing’s Shadow, Gun Insurance

-Fiscal-Cliff Can: Matt Yglesias says it’s already too late for Obama and the Republicans to sidestep the so-called fiscal cliff. “My understanding of the calendar is that we’re basically out of time already. To enact a big tax and spending bill, you’d first need agreement among the principals. Then aides would have to write it up in more precise legal language, and it’d have to be scored and sold to key members of Congress. That’s really a ‘deal before Christmas if you want to be finished by the New Year’ scenario and we’re not there.” So, what can happen over the next few days once Obama and Congress return to their seats? “Democrats and Republicans can talk about what bills they might like to pass in January.” Another possibility is that Obama and Boehner ask Congress for a few more weeks to hammer things out. However, “liberals will probably feel … that any mini-kick [of the fiscal-cliff can] disadvantages them. Given how close we are to locking the new baseline into place, and given the extent to which the GOP is already taking the blame for there being no deal, it looks pretty tempting from that perspective to just start negotiating anew on January 2.”

-Housing’s Shadow: Wall Street Journal reporter Nick Timiraos explains why the 3.4 million properties in the U.S. headed toward foreclosure–the so-called “shadow” inventory–won’t snuff out this year’s nascent housing-market recovery. For starters, the size of this shadow has shrunk from a peak of 4.7 million in 2009. Inventories of new and previously-owned homes are unusually low. Demand for homes has picked up. And “hearty investor appetites for foreclosed properties have trimmed the backlog and reduced the discount at which foreclosures sell. In September, foreclosures sold for around 7.7% less than traditional home sales, down from a 24% discount three years ago.” In other words, even if there’s a bunch of “shadow” inventory, it won’t weigh on prices as much. One warning though: “The shadow does pose a threat to some markets. States such as New York, New Jersey and Florida, where banks have struggled to meet court-administered foreclosure processes, have larger backlogs … Arizona and California, by contrast, have less restrictive foreclosure processes and have cleared more bad debt.”

-Gun Insurance: The Economist notes that a new idea for gun control is making the rounds: Mandatory fire-arm insurance laws. Owners of firearms could pay liability insurance, the same way Americans have to get car insurance. Ideally, the private-insurance market would distinguish between potentially violent and probably non-violent gun-owners. A 80-year-old grandmother might pay a low insurance rate, while a young adult in an inner city would pay more, the thinking goes. Nouriel Roubini just tweeted in favor of this, while Forbes.com and Slate have offered thoughts. Of course, 100k or 250k of insurance may not seem like enough to compensate for a loss of life, but the Economist notes, “it’s a lot better than nothing.”

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